econ 365 team

Week two’s objective discussed about interesting topics that have challenge each members in different ways. The objective of week two’s topics discusses the connection between the amount of inputs and the law of diminishing marginal productivity. Moreover, it consists of production and cost analysis. Each individual are required to analyze the relationship between productivity and the cost of production. Furthermore, the objective analyzed the effect of changes in the supply of and demand for factors of production on the price of inputs. Through this weeks objective, each member were able to take the information they obtained and refer it to their own understanding of the material through reference to their field. Through chapter 12, the law of diminishing marginal productivity at times is referred as the flowerpot law. The reason being is that if it doesn’t “hold true, the world’s entire food supply could be grown in one flowerpot.” (Colander, 2010) The law of diminishing marginal productivity states that with the addition of variable input being add to a fixed input, the additional output that firm acquire will ultimately decrease. For instance, a factory has room for so many people. As we exceed that amount, everything will simply be cluttered and the ration of workers compared to productivity will simply decrease to the point of diminishing absolute productivity. The relationships amongst productivity and the cost of production are the cost per day or the cost per hour associated to the productivity achieve within that day. In examining the two together, the productivity, which is the output for the total hours worked, is being compare to the total cost. This will show how much need to be made, and the total cost to make a product in order to reach a break-even analysis. Moreover, technological innovation leads to an improvement in productivity, which will have the effect on the cost of doing business or the activity, and will affect the prices of related